The trade you take after a loss

You know the order. The session has gone against you, the position is closed, the screen is still open. A few minutes later, another order goes in. It is quick. It needs less checking than the one before it did. And afterwards it is almost never described as a different kind of trade. It goes into the record as trade number eleven, in the same column as the other ten.

This page makes one claim only. Not that the trade was wrong. Not that you should have stayed out. Only that it was chosen after something had just happened, and that you can separate it out in your own record instead of taking anyone's word for it, including ours.

Your order history has no column for how the morning had gone

It has a time, a contract, a quantity, a price and a fill. Two orders can match in every field your broker stores and still have come from different places: one from a plan written on Sunday, the other from the twelve minutes after a position closed down. In the file they look the same. Then you sit down to review the file, and the one detail you most want is the one nobody wrote down.

The clock is the one part already written down

Your broker stamps the time on every order without being asked. You cannot see what had just happened to you when the order went in. You can see how many minutes it was after the previous position closed, and whether that position closed up or down. That is enough to tell the two kinds of order apart.

Pick your own number of minutes. If the next order goes in inside that time after a losing position closes, mark it. Twenty is only an example here. Yours might be five minutes, or an hour, or until the next break. This is not a rule about when you are allowed to trade, and we are in no position to set one. It is a label you put on your own record, so that two different things stop being counted as one.

Then the counting is plain. Of your last ten trades, how many went in inside your window, following a position that closed down? If three did, that is three out of ten. Put those three on a line of their own and set them beside the other seven, using what is already in the file. Ten is a place to start, because ten fits in your head. The further back you go, the less one afternoon weighs in the count. How far back is your call.

What to write down

Only two of those five need anything from you: your own size number, written down before you open the file, and the one word. The other three are stamped on the orders already.

Type that word before the order goes in, not that night. Afterwards the answer gets decided by the result, because a trade that worked remembers having had a plan and a trade that did not remembers being unlucky. Before the order, the same word costs you nothing and is simply accurate.

Reading the two groups next to each other

Once the two groups exist, the comparison is yours alone. Were the quantities inside your window the same as the quantities outside it? Did the column about deciding an exit look different between the two? Was there more than one such order in the same hour? And one more count, which costs nothing once the first is done: of your trading days last month, how many had any order at all inside your window?

Some will have none. If most of a month's days have one, that is a different thing from a single difficult afternoon, and it is not something you would notice by remembering. None of these questions has a right answer waiting at the end of it. They are questions about one account, yours, over a short period you chose yourself.

Nothing here says the trade after a loss is the trade that hurt you. Your own count may put it on either side. That is the reason for counting instead of arguing.

The minutes after a losing session are not a weakness to be taken out of you. They are a part of the day when decisions get made faster and with less checking. What is different in trading is that the fast decision leaves the same row in your order history as the slow one. That row is the useful part. It is already written, in your own account, at no cost to you. All you are doing is sorting it into two piles instead of one.

Next time the session goes against you, nothing has to change. The order can go in exactly as it would have. The only difference is that in the evening you will know which pile it belongs in, and in a month you will have a count where you used to have a feeling.